JAKARTA (Thomson Financial) - Indonesia will impose an export tax rate of 20 percent for July on crude palm oil (CPO), up from 15 percent in June, following the CPO price increase over the past month, the Trade Ministry said on Friday.
According to the current progressive tax system, the 20 percent export rate applies when the average CPO price in Rotterdam over the preceding month hits $1,200 a tonne or higher but is less than $1,300.
The government will impose a maximum tax rate of 25 percent if the CPO price touches $1,300 per tonne. If the price falls below $1,200 per tonne, the government will use the 15 percent tax rate.
The ministry said the CPO price in Rotterdam in the past month averaged $1,220 per tonne, against $1,181 per tonne a month before.
The government previously imposed a 20 percent tax rate in April after the CPO price in Rotterdam averaged at $1,273 a tonne in March. As a result, the country’s CPO exports dropped 62 percent to just $690 million in April from $1.82 billion in March.
The ministry also said it will increase the CPO export reference price to $1,144 per tonne for July from $1,105 per tonne for June.
The reference price is used as the base for calculating the export tax on CPO.
Indonesia is world’s biggest CPO producer, with nationwide CPO output projected to reach 18.4 million tonnes this year.
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